Further illustrating Eliezer’s misplaced confidence, Sumner’s view is about NGDP targeting, so the success of the BOJ’s policy should be based on delivering NGDP growth, not real economic variables like RGDP growth or employment rate as Eliezer implies. They were in fact successful at this (RGDP growth + Inflation = NGDP growth; with RGDP growth continuing on trend and Inflation bucking the downtrend, that’s a new NGDP trajectory, baby!). Here, with 100=March 2013 as Kuroda ascended, you can see the shift in CPI trend even before the VAT impact in April 2014. Sumner was bullish on the new BOJ policy by September 2013.
So, Eliezer, you think you have identified which econbloggers, like Scott Sumner, know better than the Bank of Japan, do you? Eliezer did identify Sumner successfully, but he got lucky. His belief in Sumner was based on a misread of Sumner’s position, one that led him to wrongly believe real economic variables would supply evidence for the veracity of the theory. Further compounding the issue, while employment rate might have been readable as supportive, as Matthew Barnett points out, RGDP was not. He is overconfident and should be more humble about his approach.
Ironically, Eliezer’s mistake actually more strongly makes his key point. The demand for humility Eliezer was writing about stemmed from the belief that even a very good reasoner oughtn’t be able to outperform “the experts.” And yet, here we have a mistaken reasoner outperforming “the experts” (at least, outperforming the hawkish experts, before they were replaced by the dovish experts who implemented the new monetary policy at the BOJ). Perhaps the case for humility is not so strong after all: “it is perfectly plausible for an econblogger to write up a good analysis of what the Bank of Japan is doing wrong, and for a sophisticated reader to reasonably agree that the analysis seems decisive, without a deep agonizing episode of Dunning-Kruger-inspired self-doubt playing any important role in the analysis.” I suppose one might need to decide how interchangeable “humility” and “agonizing self-doubt” are...
Eliezer is driving an intellectual racecar when many are driving intellectual horse-and-buggies. Still needs to be vacuumed out from time to time though.
Ironically, Eliezer’s mistake actually more strongly makes his key point. The demand for humility Eliezer was writing about stemmed from the belief that even a very good reasoner oughtn’t be able to outperform “the experts.” And yet, here we have a mistaken reasoner outperforming “the experts” (at least, outperforming the hawkish experts...
One person outperforming the experts once, is not very significant..it’s all about reliability.
Further illustrating Eliezer’s misplaced confidence, Sumner’s view is about NGDP targeting, so the success of the BOJ’s policy should be based on delivering NGDP growth, not real economic variables like RGDP growth or employment rate as Eliezer implies. They were in fact successful at this (RGDP growth + Inflation = NGDP growth; with RGDP growth continuing on trend and Inflation bucking the downtrend, that’s a new NGDP trajectory, baby!). Here, with 100=March 2013 as Kuroda ascended, you can see the shift in CPI trend even before the VAT impact in April 2014. Sumner was bullish on the new BOJ policy by September 2013.
So, Eliezer, you think you have identified which econbloggers, like Scott Sumner, know better than the Bank of Japan, do you? Eliezer did identify Sumner successfully, but he got lucky. His belief in Sumner was based on a misread of Sumner’s position, one that led him to wrongly believe real economic variables would supply evidence for the veracity of the theory. Further compounding the issue, while employment rate might have been readable as supportive, as Matthew Barnett points out, RGDP was not. He is overconfident and should be more humble about his approach.
Ironically, Eliezer’s mistake actually more strongly makes his key point. The demand for humility Eliezer was writing about stemmed from the belief that even a very good reasoner oughtn’t be able to outperform “the experts.” And yet, here we have a mistaken reasoner outperforming “the experts” (at least, outperforming the hawkish experts, before they were replaced by the dovish experts who implemented the new monetary policy at the BOJ). Perhaps the case for humility is not so strong after all: “it is perfectly plausible for an econblogger to write up a good analysis of what the Bank of Japan is doing wrong, and for a sophisticated reader to reasonably agree that the analysis seems decisive, without a deep agonizing episode of Dunning-Kruger-inspired self-doubt playing any important role in the analysis.” I suppose one might need to decide how interchangeable “humility” and “agonizing self-doubt” are...
Eliezer is driving an intellectual racecar when many are driving intellectual horse-and-buggies. Still needs to be vacuumed out from time to time though.
One person outperforming the experts once, is not very significant..it’s all about reliability.